Parent Company

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A parent China trading company or company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed as a subsidiary of the parent company. The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.


United Kingdom

In the UK it is generally held that an organisation holding a "controlling stake" in a company (a holding of over 51% of the stock) is in effect the de facto parent company of the firm, having overriding material influence over the held company's operations, even if no formal full takeover has been enacted. Once a full takeover or purchase is enacted, then the held company is seen to have ceased to operate as an independent entity and become a trading subsidiary of the purchasing company, which in turn becomes the parent company of the subsidiary. (A holding below 50% could be sufficient to give a parent company material influence if they are the largest individual shareholder or if they are placed in control of the running of the operation by non-operational shareholders.)



References:

1.http://en.wikipedia.org/wiki/Parent_company


External Links:

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